Lipella Pharmaceuticals Inc. has been funded by National Institutes of Health Small Business Innovation and Research (SBIR) grants to develop intravesical liposome nanoparticles to treat overactive bladder (OAB), interstitial cystitis/painful bladder syndrome (IC/PBS). The current SBIR will allow Lipella to expand its portfolio of patent applications regarding specific intravesical liposomal delivery techniques using liposomes as platform technology. In recent years, intravesical injections of botulinum neurotoxin (BoNT) have revolutionized the treatment of intractable lower urinary tract symptoms associated with idiopathic OAB or neurogenic detrusor overactivity. However, BoNT treatment is attended by many adverse effects such as impaired detrusor contractility, large post-void residual volumes and urinary retention. We hypothesize that adverse effects of BoNT can be drastically reduced by restricting its action only to urothelium and suburothelium space. We can achieve the objective of topical delivery of BoNT to bladder urothelium by using liposomal nanotechnology. The phase 1 funding for this project supported the laboratory scale development towards a liposome based liquid instillation of BoNT with significant physiological effect in bladder without any adverse effects on bladder histology. The studies described in phase II will test the hypothesis that liposome encapsulation provides higher therapeutic efficacy and safety (improves therapeutic index) than the currently used method of cystoscopic injection of BoNT. In addition, we will optimize the liposome platform technology for BoNT in comparison to a small molecular weight potent drug (tacrolimus) to achieve desired product stability of liposome formulation and shelf life that can sustain commercial use. Funding of this SBIR-II will allow Lipella to bridge our technology to additional intravesical drug delivery applications and will allow Lipella Pharmaceutical to prepare IND package for regulatory submission. Lipella has come a long way since the initial discovery and translation from academic to biotech startup. With the challenging economy condition and reduction in early-stage biotech venture capital funding, the importance of this SBIR-II to Lipella's future cannot be understated and it fulfills the important mission of NIH on bringing research discoveries from lab to the clinic. With the support of the NIH, Lipella can become a sustainable tax paying company that improves the health care of Americans and supports the local and national economy.